A new report by CICERO Climate Finance identifies the biggest risks of climate change for investors. The report finds that some impacts are already happening earlier than anticipated and new ones are expected in the time horizon used by investors.
Olso-based CICERO, a non-profit interdisciplinary research institute, is an international partner of the Priestley International Centre for Climate. Kristin Halvorsen, director of CICERO and former Minister of Finance in Norway, who attended the Priestley Centre’s 2016 launch, said: “Our Shades of Climate Risk help investors to calculate and avoid possible climate costs in the next decades. We assess, based on the latest scientific literature, which impacts and policies have a high probability of affecting investments in a particular region and flag those that require immediate attention from investors.”
The report also provides guidance on which scenarios investors should use to stress test their portfolios for climate risk, as recommended by the Task Force on Climate-Related Financial Disclosure.
“Our assessment, based on the current climate policies and pledges, is that keeping global average warming below 2°C is not likely,” said Glen Peters, senior researcher at CICERO. “We recommend investors to stress test across various scenarios, including both high-end scenarios with catastrophic changes resulting from weaker than expected policies and low-end scenarios with ambitious policies but high transition risks.”